JAY – Verso Corporation has announced that it will shut down the No. 3 paper machine and its associated equipment at the Androscoggin Mill, permanently eliminating 120 positions. The employees that staffed that equipment were laid off earlier this year after the No. 3 machine was idled.
Verso made the announcement Wednesday, tying the shut down to declining customer demand for coated paper. Shutting down the No. 3 machine will reduce the Androscoggin Mill’s capacity by approximately 200,000 tons. In a statement released Wednesday, Verso indicated that the shut down will be effective Aug. 1 and would be complete by the end of the third quarter of this year. The No. 3 paper machine, a recovery boiler and a digester that support the equipment will be impacted.
Verso announced it was idling the equipment in November of 2016, with the 190 employees laid off in early 2017. That reduced the then-560 employee workforce by approximately one-third, following the 2015 shutdown of two other machines, eliminating 300 other positions. The corporation also sold a subsidiary energy company to Eagle Creek Renewable Energy LLC, including four hydroelectric generation facilities in Livermore Falls, Livermore and Jay, for $62 million.
Verso and its various subsidiary companies filed for Chapter 11 bankruptcy in early 2016, emerging in the summer of 2016 with $2.4 billion in reduced debt and $595 million in exit financing.
Products previously made using the No. 3 machine would be transitioned to lower-cost machines at other mills, Verso said, with Chief Executive Officer B. Christopher DiSantis saying that the company would leave “no stone unturned” to move toward “sustained profitability” in a market where demand for paper products continues to decline.
“Although the footprint of the Androscoggin Mill is getting smaller,” DiSantis said, as part of a statement released Wednesday, “we continue to take steps to position the facility as a leading producer for the growing specialty papers market.”
Verso employees impacted by the shut down would receive severance, the company said, with Human Resources personnel scheduling individual meetings in the coming days.
“While permanently closing this capacity is the right strategic decision for Verso as a whole, we are mindful of the effects this action will have on the people at the Androscoggin Mill who are directly affected, and we are committed to treating them with fairness, dignity and respect during this difficult time,” DiSantis said. “On behalf of the entire Verso team, I want to express our sincere thanks and appreciation to them for their dedicated service and many contributions to the mill and to our company.”
It’s sad to note that the employees affected by the temporary layoff had to hear the final word thru the media before paperwork was received in the mail.
This move, I believe, is more a tax accounting decision to be able to fully depreciate the equipment and receive the tax deductions. I wouldn’t be surprised to see them invest some money to increase the production of the specialty papers. I see the stock price went up 40% in the last month so some investors believe they are going to be around for a while. Time will tell.
THEY NEW ALL THIS LAST YEAR.
What did LePage call them?
They used this machine for leverage in negotiating contracts with other mills. The employees were left hanging in limbo for 6 mos. Severance checks can now be sent to the workers effected. Hopefully there is someone out there who might buy this mill and operate it to its full potential.
If the workers heard it through the media, it sure wasn’t this particular news source who took a day to write their story after it was announced…
Sorry for all the families involved, and the businesses/schools that may be negatively affected. Hard to compete with cheap foreign manufacturing labor costs. At least President Trump’s efforts to keep companies from locating plants elsewhere and bring some manufacturing jobs back here may be helping. Hope everyone will lend their support to those efforts.
Arnold P. Why is it that all of Trumps family goods are made over seas ? Shouldn’t he bring some of the family’s business back here to make America great again??
And why is it that some of the residents of Jay still need to have trash pick-up paid out of our taxes??? More cuts will need to be made, not services added back in as the mill valuation continues to decrease.
Does not look like President Trump has much choice in where he buys his goods from no more than anyone else
seems to since most all products seem to be manufactured and imported from overseas now anyway.
Hard to find anything made in the United States now.I understand he is working on that.
Need to experience a lot of patience.
It’s sad to see this business decision affecting more families in the area. When will people stop worshiping the businessman/politician and realize they don’t care about you or your job unless it make them money or there’s an election around the corner. People in charge of large businesses care about their own retirement plans and they serve their investors. Everyone has a choice but only those with sound ethics make the right one for a community and unfortunately there aren’t many in the top heavy industries to make a dent.
Trump contradicts himself by saying America First while him and his family together own dozens of manufacturing based businesses that all produce out of country. He said he would bring back American Steel while building with imported steel. Contrary to the excuses, it is possible to still manufacture in the States and if you say one thing and live by the complete opposite example then you are a …. Again, sorry for the families who will be affected by this shut down. Lets hope they can still get medical care.
@ Sad, very well stated. The country can not be run like some high dollar tie company.
Good,honest factual letter,Sad.
Sure people shouldn’t worship businessmen and politicians. That is why I only want a job from a businessman and don’t listen to politicians like Obama, Hillary, and Sanders. (They promise you that government will make it all better, while the only outcome is bigger problems for us. They seem to live the high life and get richer.) Of course businessmen care about their retirement plans and investors. They also have their own needs and families to take care of, and they have a responsibility to their investors. If someone loans you their money to make a business a go and earn more money, you had better care about the investor. But tell me. Doesn’t the common man work to meet his needs and plan for his\her future?
What is the right, ethical choice here? Keep all the machines running though you are losing money? Which is better? Shutting down one machine, or running a whole mill into the ground? It is not about what is “fair” or how “sad” something is. This is a hard day for those who lost their jobs. Life is hard, but blaming businessmen who have to make hard choices only fuels the fire. It doesn’t solve anything.
It is sad that so many people have lost their jobs in the State of Maine — especially the paper mills. For all those people who have been so anxious to go “paperless” — well this is the result. If we keep shutting down mills in our beautiful State soon more and more people will move. We need to start bringing back our manufacturing industries like shoe companies and paper mills, etc. so the hard working people of Maine can have some decent jobs…..
I moved here as a teen in the early 80’s when shoe factories and paper mills were still thriving. I can remember how beautiful all the small towns were – no matter where you drove there were small businesses making a go of it and the little neighborhoods were stunning. Now when I drive through these same small towns it is so sad. Businesses are gone, buildings empty and neighborhoods look more like run down deserted ghost towns.
Prior to moving here my family would come to visit relatives and make our yearly purchase of the “best made shoes” my dad said he could ever find….He loved shopping at Dexters and Bass — where are they now? Things really need to change so we don’t lose any more businesses…..
Maine will survive the failure of a few industries in the same manner we have survived all the other business cycles that have shaped our economy. What does us the most harm is dysfunctional politicians that spin the BS into gold for themselves while screwing the good citizens of Maine. NAFTA took out the wood industry by favoring subsidized Canadian softwood over the US product. Politicians failed to recognize the inequity and the Canadian government capatilized on our market at our own expense. The obummer supporters and the socialists in disgusta are the ones that sold Maine out. Now we have a welfare state that is struggling to keep the welfare flowing to the somalies, and drug addicts but has failed to nurture the industries that are/were our lifeblood. In order for Maine to survive we all have to live within our collective means and recognize that unfounded government assistance is a thing of the past. Hate President Trump or love him but one has to admit he is moving our country out of the dark times left to us by the liberals that warned seats in DC for 8 years. Have a great summer day out there.
@sad, Thank you. I stand corrected. This is not a class warfare rant but rather some eye opening reality. We are all to blame for poor ethical choices. I sometimes buy cheap paper products manufactured overseas because I don’t even know where to buy paper made down the street. We all fall prey to aggressive box store advertising that supports so many of these competing manufacturing industries falling short. But don;t be to self righteous just yet, the tax payer will give the businesses incentive to buy a new machine like in Rumford, they are asking for a dozen or so million in Maine taxpayer gifts (incentive) to purchase a new machine. Or maybe we don;t support the small time needy individual who works 40-60 hours a week on min wage and still needs help with medical insurance but we are fine with the government spending 10 million tax payer dollars purchasing blueberries down east this year. Seems like trickle down economics at its best. every fed dollar we pump into Maine will be redistributed in a Maine community. If you want your taxes back then this is how it works. But don’t thing the top will take smaller cut. I’m all for backing the mills and commissioning ships at Bath just to pump the economy but I don’t “feel” for the well paid top end who will never know what it means to collect bottles to put gas in the car. We all have to live within limits. Keep working for your businessman and you will soon realize he made more money off the security details at his babel tower in the last 6 months than any politician lasting 8 years. Don’t worry, play golf and speak about blind faith. Thanks for the perspective.
President Trump’s products are made overseas because his stuff goes to a niche market. Any factories in the states that may have had the capablity to manufacture those products have moved overseas, in business, you don’t invest billions to make millions, the cost of building a new or reactivating an old mill to produce a rather small quanity of items is bad business. It would quickly go under and sit idle. Now if the mill in Jay produced news print paper rather than special copy paper, it may have staved off death for awhile longer. Most copiers and printers in homes and offices use uncoated paper, business cards, poster board, photography paper are forms of coated paper.
Take it easy, no need to be facetious with the personal shots. I don’t care for golf and don’t have blind faith. Here is a little personal disclosure. Personal income is around $20,000. Family is around $45,000. I have bills, loans and taxes to pay. At this point, my 2 jobs offer one thing— trading hours of work for money. The businessman I work for I deeply respect because he has made hard sacrifices for his company and for me personally. Before wading into unknown waters next time, maybe just focus on the questions I asked.
And it does seem that you are focusing on class warfare. The businessmen and their investors make too much at the expense of the common man. I have never understood why using envy as a defense against greed is a valid argument.
It seems to be the “norm” for Maine. I was a shoe worker and when it closed I was so stressed out I didn’t know what I was going to do but after all was said and done, I was glad I finally moved on. The shoe industry is so hard on your body when they treat you like your mechanical and keep pushing. Keep your heads up and you will find work, you may have to cut corners but you will survive.
@Sad. I apologize for my last post, it was poor form. You seem reasonable and I can see some of your points. As far as anything meaningful here it’s all opinions in everyone’s posts. Some have meaning or purpose some are just useless.
To respectfully answer your question: I can’t speak for everyone but most of us are working toward that. . . A majority of us and it’s day by day. People think 40k in this area is a lot and if managed properly it sustains a small family with relative comfort and it may be all you need. You know the taxes that also come along with that.
Your employer sounds like they look out for you and that’s great but they, correct me if I’m wrong, seem like a small business run by the owner. I’ve worked for a lot good folks like that too and wouldn’t really say they are board room businessmen.
The issue I have with this is that it is sad to see this great loss and in these uncertain times. The effect it will have on the workers and families.. and overall local economy is a loss to everyone including small business owners.
This is what I see. Doesn’t seem like good management but I don’t really know?
“Verso announced it was idling the equipment in November of 2016, with the 190 employees laid off in early 2017. That reduced the then-560 employee workforce by approximately one-third, following the 2015 shutdown of two other machines, eliminating 300 other positions. The corporation also sold a subsidiary energy company to Eagle Creek Renewable Energy LLC, including four hydroelectric generation facilities in Livermore Falls, Livermore and Jay, for $62 million.”
This.
“Verso and its various subsidiary companies filed for Chapter 11 bankruptcy in early 2016, emerging in the summer of 2016 with $2.4 billion in reduced debt and $595 million in exit financing.”
And. (Admitting that I didn’t fact check this comment, I don’t know where to)
Michael, “I see the stock price went up 40% in the last month so some investors believe they are going to be around for a while.”
To the folks at the mill who had to make this decision I can only observe, react, reflect and compare to a timeline with an outside opinion but in no way am I an expert. I’m sure it wasn’t an easy decision for management to make and it will take time to tell if it helped a greater good. The last thing this area needs is a full closure.
Advice: Time to be creative, innovative, and think about training for the needs of the future.
“At least President Trump’s efforts to keep companies from locating plants elsewhere and bring some manufacturing jobs back here may be helping.”
Not really.
What the Layoffs Look Like at the Carrier Plant Trump Said He’d Save
http://www.newyorker.com/news/news-desk/what-its-like-to-get-laid-off-at-the-carrier-plant-trump-said-hed-save